Miami Single-Family Homes Continue Strong Performance.
February 23, 2017
Miami-Dade County single-family home sales, median prices and dollar volume increased year-over-year in January, according to a new report by the MIAMI Association of REALTORS® (MIAMI) and the Multiple Listing Service (MLS) system.
Led by a significant surge in traditional sales and transactions for properties listed from $200,000 to $600,000, Miami single-family home sales rose 4.4 percent last month. Median sale prices ($310,000) and dollar volume ($397 million) expanded 14.8 percent and 7.1 percent, respectively.
“Miami real estate opened 2017 with strong sales for single-family homes,” said Christopher Zoller, the 2017 MIAMI chairman of the board. “Now that the uncertainty of the election is over, home buyers are coming off the sidelines. There is high demand for homes priced from $200K to $600K. As reflected in our January statistics, we are also seeing Miami single-family home sales for properties from $600K to $1 million showing strong gains.”
More home buyers are taking advantage of current mortgage rates, which despite their increases are still at historic lows. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage is 4.15 percent.
Single-Family Home Sales Rise
Total existing Miami-Dade County residential sales — which posted a record year in 2013 and near record years in 2014 and 2015 — decreased 3.3 percent year-over-year from 1,790 to 1,731.
Single-family home sales rose 4.4 percent year-over-year from 821 in January 2016 to 857 last month. The Miami single-family homes market is coming off a 2016 in which it posted the third-most annual sales in county history. Existing condo sales — which are competing with a robust new construction market — decreased 9.8 percent year-over-year, from 969 transactions to 874.
Sales for mid-market Miami single-family homes, or properties listed from $200,000 to $600,000, increased 22.5 percent in January, from 476 to 583. Homes sold in the $200K to $600K range represent 33.7 percent of total Miami single-family home sales.
Sales for Miami single-family homes listed from $600,000 to $1 million increased 62.3 percent in January, from 53 to 86.
Miami single-family traditional sales also posted gains, jumping 19.3 percent from last year. This growth in traditional sales, from 612 to 730 transactions, is great news for the local market.
Total sales volume for all properties accounted for $702.3 million last month, a 5.2 percent decrease from the $740.5 million sales volume a year ago. These sales do not include Miami’s multi-billion dollar new construction condo market.
Median Prices Rise for All Properties
Miami-Dade County single-family home prices jumped 14.8 percent in January 2017, increasing from $270,000 to $310,000. Miami single-family home prices have now risen for 62 consecutive months, a streak spanning more than five years. Existing condos increased 8.4 percent, from $205,000 to $222,250. Condo prices have increased in 66 of the last 68 months.
Despite the rise in prices, Miami real estate remains a major bargain. A condominium in Miami-Fort Lauderdale-Miami Beach cost $170,000 in 2016 Q3, according to the National Association of REALTORS® (NAR). The average cost of a 120 square meter apartment in 2016 in the prime inner city areas of London ($4.1 million), Hong Kong ($3.1 million), and New York ($2.2 million) were at least ten times higher, according to Global Property Guide.
Miami Distressed Sales Continue to Decline
Total Miami distressed sales declined 44.7 percent year-over-year, from 398 to 220 last month. Only 12.7 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 22.2 percent in January 2016. In 2009, distressed sales comprised 70 percent of Miami sales.
Short sales and REOs accounted for 2.9 and 9.8 percent, respectively, of total Miami sales in January 2017. Short sale transactions dropped 35.4 percent year-over-year while REOs fell 47.0 percent.
Nationally, distressed sales accounted for 7 percent of all sales in January, down from 9 percent a year ago.
Miami Real Estate Selling Fast and Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales was 61 days, a 27.1 percent increase from 48 days last year. The median number of days between the listing date and closing date for single-family properties decreased 1.7 percent to 113 days.
For condos, the median time to contract increased 13.3 percent to 85 days. The median number of days between the listing date and closing date increased 4.8 percent to 131 days.
The median percent of original list price received for single-family homes decreased 1.0 percent to 94.5 percent. The median percent of original list price received for existing condominiums decreased 0.5 percent to 93.4 percent.
Lack of Condo Financing Continues to Impact Sales
In addition to competing sales from new construction units, the lack of access to mortgage loans continues to impact existing condominiums. Of the 9,307 condominium buildings in Miami-Dade and Broward Counties, only 12 are approved for Federal Housing Administration loans, down from 29 last year, according to statistics from the Florida Department of Business and Professional Regulation and FHA.
National and State Statistics
Nationally, total existing-home sales expanded 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016, according to NAR. January's sales pace is 3.8 percent higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).
Statewide closed sales of existing single-family homes totaled 16,779 last month, up 5.2 percent from January 2016, according to Florida Realtors. Statewide condo closed sales totaled 7,209 last month, up 6.2 percent compared to January 2016.
The national median existing-home price for all housing types in January was $228,900, up 7.1 percent from January 2016 ($213,700). January's price increase was the fastest since last January (8.1 percent) and marks the 59th consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $220,000, up 10.1 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in January was $161,000, up 6.6 percent over the year-ago figure. January marked the 62nd month in a row that statewide median prices for both sectors rose year-over-year.
Miami’s Cash Buyers Represent Nearly Double the National Figure
Miami cash transactions comprised 43.4 percent of January total closed sales, compared to 52.7 percent last year. Miami cash transactions are more than double the national figure of 23 percent. Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami’s cash purchases as 59.5 percent of condo closings were made in cash in January compared to 27.1 percent of single-family home sales.
Balanced Market for Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes increased 5.2 percent in January from 6,262 active listings last year to 6,590 last month. Condominium inventory increased 13.8 percent to 13,284 from 15,111 listings during the same period in 2016.
Single-family homes have a 6.0-month supply, which indicates a balanced market. Existing condominiums have a 13.4-month supply, which indicates a buyers’ market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
Total active listings at the end of January increased 11.0 percent year-over-year, from 19,546 to 21,701. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes decreased 3.0 percent, from 1,816 to 1,871. New listings of condominiums decreased 3.8 percent, from 2,742 to 2,637.
Nationally, total housing inventory at the end of January rose 2.4 percent to 1.69 million existing homes available for sale, but is still 7.1 percent lower than a year ago (1.82 million) and has fallen year-over-year for 20 straight months.
New Construction Market Update
Most Miami preconstruction condo developers require a 50-percent cash deposit on new units. The deposit is not only one of the highest in the United States but is significantly higher than the 20 percent required during the last real estate cycle. The large cash deposits show how committed Miami’s preconstruction condo buyers are to the local market.
Sixty-four condo towers with 6,760 units have been completed in Miami-Dade County east of I-95 in the last five years since the start of 2011, according to a Jan. 23 report from preconstruction condo projects website Cranespotters.com and MIAMI.